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Tuesday, 06 September 11
INDONESIAS PROPOSED COAL EXPORT BAN MAY HAVE IMPACT ON THE INDIAN POWER SECTOR - DIPESH DIPU
.jpg) COALspot.com - This is a special interview about Indonesian proposed coal export ban by 2014, with Mr. Dipesh Dipu, Director of Deloitte Touche Tohmatsu, India.
The Indonesian government is currently in the process of drafting a new regulation that could ban the export of low-grade coal by January 12, 2014. This is likely to apply to coal below 5700 kcal/kg on air dried basis in value.
As of now Indonesia is producing around 150 million tons of coal with calorific value below 5700 GAD (according to chairman of Indonesian coal mining association). However by 2014, there are possibilities the total production of below 5700 GAD coal may reach more than 200 million per annum.
Will Indonesian coal export ban impact on the Indian fuel requirements?
The earlier grade of coal that was being considered for proposed ban has GCV of 5100 kcal/kg of less (adb), which can be comparable to 3800-4200 kcal/kg (arb) domestic coal available in India. This grade of coal has found favor in India primarily due to likely price advantage but economics of power generation based on such grade of imported coal may be a suspect. This considering that such grades of coal from Indonesia typically have high moisture content, which makes transportation cost per unit of energy generated higher. The quantum of the low grade of coal (<5100 kcal/kg adb) procured from Indonesia is likely to remain relatively low.
However, if the new definition of low grade coal is applied (<5700 kcal/kg adb), it may be reasonable to believe that such a ban may have impact on the Indian power sector as volumes in this grade of coal are expected to rise in the proportion of coal exports to India. Several of the acquisitions made by Indian power generation companies in Indonesia have been in coal blocks that will produce coal of this grade, and a blanket ban on the exports can jeopardize power plant development in India.
On the other hand, the domestic Indonesian market may not be prepared to consume all the coal mined of this grade in view of the power generation capacity addition plans in Indonesia. In such a case, the coal mine development is likely to be deferred. The Indonesian law makers may need to reconsider domestic market demand, investment climate in coal sector and impact of the legislation on the export revenues.
What is the alternative source for Indian power industry if the proposed coal export ban come into effect by 2014?
Indian power generation companies have been forced to look out for coal assets abroad due to the investment and regulatory environment within the country. India boasts of more than 110 billion tonnes of coal reserves, which largely fall within a 300 meters of depth. If the regulatory and investment environment is amended to allow greater participation of private sector Indian dependence on imports will be reduced.
However, for imports, India will continue to look at Indonesia, South Africa, Australia and newer destinations like Mozambique and Columbia. But these sources also have constraints, domestic demands in South Africa is likely to restrict quantum jump in exports out of South Africa. Indonesia has also proposed domestic market obligations. Mozambique may have infrastructure constraints for large volumes of coal being transported from Tete province to ports of Maputo, Ncala or Beira. Australian coal is of high quality but may have higher costs of mining and transport.
What would be the additional cost if Indian consumers switch their sourcing origin from Indonesia?
Indonesia has competitive advantage due to its geographical closeness. However, on a per tonne basis, assuming comparable quality, costs of transport may make marginal difference when compared with South Africa and Mozambique.
When compared to Australian coal, due to the high quality, cost of energy may well be comparable even though shipping costs are higher. Between Indonesian coal (5500 kcal/kg adb priced at USD 90 per tonne) and Australian coal (6500 kcal/kg adb priced at USD 120 per tonne), indicative variable cost difference of power generation may be about Indian Rupees 0.20 to 0.30 per kWh (electricity unit) in favor of Indonesian coal.
Will it affect Indian economy growth or this coal export ban is ignorable as India can easily identify alternative sources of fuel?
The magnitude of growth in power generation in India will necessarily mean that coal will remain the mainstay. Natural gas has had issues of availability. Nuclear plant development is facing socio-political challenge in view of the risks of technology failure. Development of hydel power has also faced issues of land acquisition, rehabilitation & resettlement apart from the technical issues of hydro-geological features. Renewable sources such as solar and wind generation are still projected to constitute a small portion of India power generation mix. Identifying an alternative source that can match coal in its accessibility, availability and affordability in the context of scale of capacity addition required in India is a challenge.
What is the Indian government's role on this issue, whether government has to come out with the solution such as easing Indian mining and environment law, open up mining for foreigners, G2G arrangement, etc…?
There is a need to look at domestic sources with pro-active and constructive approach and make all necessary legal and statutory amendments that make the resources available and mineable. Easing the regulations may not be one of such measures but making those regulations work in sync with each other in a time bound and predictable manner must certainly be.
There is certainly a case for opening the domestic coal sector for private participation, including independent miners, and for foreign participation so that newer technology and enhanced scale of operations are implemented in India. The regulation also needs to permit risk capital to come in for prospecting and exploration.
For imports the G2G relations can be leveraged to secure coal assets. India has good relationship with Indonesia and has also signed a tax treaty with Mozambique in 2010 which will facilitate investments. Government may also engage with these countries to ease exports to India and extend fiscal support to coal mining companies investing in mining and associated infrastructure development.
About Dipesh Dipu
Dipesh Dipu works as Director with Deloitte Touche Tohmatsu India Pvt. Ltd in the Energy and Resources consulting practice of the firm and anchors the Firm’s initiative in the mining and metals sectors.
He is a mining engineering graduate from Indian School of Mines and is a Chartered Financial Analyst (CFA). He has also done executive program in business management from Indian Institute of Management Calcutta. Dipesh has recently been awarded the Abheraj Baldota Gold Medal for the Young Mining Engineer of the Year 2007 by the Mining Engineers’ Association of India in recognition of his contributions in the improvement of mining industry in India.
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Thursday, 28 July 16
FITCH RAISES CORPORATE OIL PRICE ASSUMPTION FOR 2016 TO USD42
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Thursday, 28 July 16
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Tuesday, 26 July 16
NORTH P&I CLUB EXPLAINS HOW TO AVOID CLAIMS FOR SELF-COOKING SOYA BEANS
KNOWLEDGE TO ELEVATE
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- Toyota Tsusho Corporation, Japan
- Goldman Sachs - Singapore
- Formosa Plastics Group - Taiwan
- Planning Commission, India
- Electricity Generating Authority of Thailand
- Chamber of Mines of South Africa
- Indian Energy Exchange, India
- Mjunction Services Limited - India
- Kumho Petrochemical, South Korea
- Electricity Authority, New Zealand
- Therma Luzon, Inc, Philippines
- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- Bhatia International Limited - India
- Indian Oil Corporation Limited
- Kaltim Prima Coal - Indonesia
- Singapore Mercantile Exchange
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- Uttam Galva Steels Limited - India
- Minerals Council of Australia
- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- Karaikal Port Pvt Ltd - India
- Indonesian Coal Mining Association
- Pipit Mutiara Jaya. PT, Indonesia
- Grasim Industreis Ltd - India
- Indo Tambangraya Megah - Indonesia
- Larsen & Toubro Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- SMC Global Power, Philippines
- Petron Corporation, Philippines
- Orica Mining Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Central Java Power - Indonesia
- Bharathi Cement Corporation - India
- Kalimantan Lumbung Energi - Indonesia
- Binh Thuan Hamico - Vietnam
- Standard Chartered Bank - UAE
- Siam City Cement PLC, Thailand
- European Bulk Services B.V. - Netherlands
- Simpson Spence & Young - Indonesia
- Medco Energi Mining Internasional
- PTC India Limited - India
- The University of Queensland
- ICICI Bank Limited - India
- Wood Mackenzie - Singapore
- Directorate Of Revenue Intelligence - India
- IEA Clean Coal Centre - UK
- Bukit Baiduri Energy - Indonesia
- Central Electricity Authority - India
- Renaissance Capital - South Africa
- Aditya Birla Group - India
- Parliament of New Zealand
- Energy Link Ltd, New Zealand
- LBH Netherlands Bv - Netherlands
- Commonwealth Bank - Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Price Waterhouse Coopers - Russia
- GVK Power & Infra Limited - India
- Australian Coal Association
- Coalindo Energy - Indonesia
- Global Business Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Deloitte Consulting - India
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- Ministry of Mines - Canada
- Attock Cement Pakistan Limited
- Bayan Resources Tbk. - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- ASAPP Information Group - India
- Manunggal Multi Energi - Indonesia
- Tata Chemicals Ltd - India
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Siam City Cement - Thailand
- Independent Power Producers Association of India
- Gujarat Sidhee Cement - India
- Thai Mozambique Logistica
- Coal and Oil Company - UAE
- India Bulls Power Limited - India
- SN Aboitiz Power Inc, Philippines
- London Commodity Brokers - England
- Bangladesh Power Developement Board
- Romanian Commodities Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- GN Power Mariveles Coal Plant, Philippines
- Merrill Lynch Commodities Europe
- PNOC Exploration Corporation - Philippines
- Madhucon Powers Ltd - India
- Global Green Power PLC Corporation, Philippines
- Semirara Mining Corp, Philippines
- Indogreen Group - Indonesia
- Samtan Co., Ltd - South Korea
- Cigading International Bulk Terminal - Indonesia
- Marubeni Corporation - India
- Africa Commodities Group - South Africa
- Borneo Indobara - Indonesia
- TeaM Sual Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Eastern Coal Council - USA
- Maharashtra Electricity Regulatory Commission - India
- Directorate General of MIneral and Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Thiess Contractors Indonesia
- Bulk Trading Sa - Switzerland
- Gujarat Mineral Development Corp Ltd - India
- CNBM International Corporation - China
- Altura Mining Limited, Indonesia
- Rio Tinto Coal - Australia
- Malabar Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Anglo American - United Kingdom
- Jindal Steel & Power Ltd - India
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Neyveli Lignite Corporation Ltd, - India
- Heidelberg Cement - Germany
- Videocon Industries ltd - India
- Power Finance Corporation Ltd., India
- Vizag Seaport Private Limited - India
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Savvy Resources Ltd - HongKong
- Globalindo Alam Lestari - Indonesia
- Trasteel International SA, Italy
- Sical Logistics Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- White Energy Company Limited
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Sindya Power Generating Company Private Ltd
- Agrawal Coal Company - India
- VISA Power Limited - India
- Global Coal Blending Company Limited - Australia
- IHS Mccloskey Coal Group - USA
- Maheswari Brothers Coal Limited - India
- Ministry of Transport, Egypt
- Dalmia Cement Bharat India
- Metalloyd Limited - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Oldendorff Carriers - Singapore
- Port Waratah Coal Services - Australia
- New Zealand Coal & Carbon
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- Iligan Light & Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- Miang Besar Coal Terminal - Indonesia
- Kobexindo Tractors - Indoneisa
- MS Steel International - UAE
- Aboitiz Power Corporation - Philippines
- Georgia Ports Authority, United States
- Bukit Makmur.PT - Indonesia
- Vedanta Resources Plc - India
- Orica Australia Pty. Ltd.
- Pendopo Energi Batubara - Indonesia
- Tamil Nadu electricity Board
- Kideco Jaya Agung - Indonesia
- Lanco Infratech Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- AsiaOL BioFuels Corp., Philippines
- GMR Energy Limited - India
- Kapuas Tunggal Persada - Indonesia
- McConnell Dowell - Australia
- Star Paper Mills Limited - India
- Mercator Lines Limited - India
- Mintek Dendrill Indonesia
- Billiton Holdings Pty Ltd - Australia
- Xindia Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Ind-Barath Power Infra Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMG Consultants - Indonesia
- PowerSource Philippines DevCo
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Posco Energy - South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- Bhushan Steel Limited - India
- Meralco Power Generation, Philippines
- Intertek Mineral Services - Indonesia
- Sojitz Corporation - Japan
- Karbindo Abesyapradhi - Indoneisa
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- OPG Power Generation Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
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